The Winklevoss twins are not optimistic about the future of crypto. The duo, founders of crypto exchange, Gemini, announced that they will be laying off 10% of their employees due to “turbulent market conditions that are likely to persist for some time.”
The twins have promised severance packages and healthcare benefits for the released employees, and plan to close all of their physical offices, writing, “so that these conversations will be held remotely to protect the privacy of each impacted individual. Our highest priority throughout will be to treat everyone affected with compassion and respect.”
The move comes from a very turbulent market. Other companies have also been initiating lay-offs to manage overhead costs and to yield to a potential bear market.
Even major companies like Coinbase have announced their own plans to slow down hiring, and Bitso, a Latin American cryptocurrency exchange had to let go of 80 employees recently.
Amongst crypto companies, exchanges will be hit the hardest by a market slow-down as retail investor trading volume dies down. On the other hand, a Fidelity executive said earlier this week that they actually plan to double their headcount this year to account for the growing demand from institutional investors. Meanwhile, FTX, the second-largest crypto exchange, is giving the impression of playing offense, as it expands into equities trading to diversify its business amid risk in the crypto market and eyes the acquisition of an Indian gaming startup. FTX was last valued at $32 billion in January.
Gemini’s co-founders are a bit more positive in the face of volatility, stating that they believe there’s a somewhat expected volatility in what they call the “crypto revolution.”
“Its path can best be described as punctuated equilibrium — periods of equilibrium or stasis that are punctuated by dramatic moments of hypergrowth, followed by sharp contractions that settle down to a new equilibrium that is higher than the one before,” the co-founders said in the post. They continue to say that crypto has entered a temporary downturn, otherwise known as the contraction phase, further “compounded by the current macroeconomic and geopolitical turmoil.”
The company did take advantage of the venture capital boom, last year raising $400 million in a growth equity round led by $7.1 billion. In January, the startup acquired Blockrize for an undisclosed amount and teased plans to launch a credit card with bitcoin rewards. It’s unclear if layoffs impact the Blockrize team, and if so, how it impacts Gemini’s product roadmap.